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Racial Inequality Is Hollowing Out America’s Middle Class

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America’s middle class is under assault. And as our country becomes more diverse, our racial wealth gap means it’s also becoming poorer.

Since 1983, national median wealth has declined by 20 percent, falling from $73,000 to $64,000 in 2013. And U.S. homeownership has been in a steady decline since 2005.

While we often hear about the struggles of the white working class, a driving force behind this trend is an accelerating decline in black and Latino household wealth.

Over those three decades, the wealth of median black and Latino households decreased by 75 percent and 50 percent, respectively, while median white household wealth actually rose a little. As of 2013, median whites had $116,800 in wealth — compared to just $2,000 for Latinos and $1,700 for blacks.

This wealth decline is a threat to the viability of the American middle class and the nation’s overall economic health. Families with more wealth can cover emergencies without going into debt and take advantage of economic opportunity, such as buying a home, saving for college, or starting a business.

A Growing Gap

We looked at the growing racial wealth gap in a new report for the Institute for Policy Studies and Prosperity Now.

We found that if these appalling trends continue, median black household wealth will hit zeroby 2053, even while median white wealth continues to climb. Latino net worth will hit zero two decades later, according to our projections.

It’s in everyone’s interest to reverse these trends. Growing racial wealth inequality is bringing down median American middle class wealth, and with it shrinking the middle class — especially as Americans of color make up an increasing share of the U.S. population.

The causes of this racial wealth divide have little to do with individual behavior. Instead, they’re the result of a range of systemic factors and policies.

These include past discriminatory housing policies that continue to fuel an enormous racial divide in homeownership rates, as well as an “upside down” tax system that helps the wealthiest households get wealthier while providing the lowest income families with almost nothing.

The American middle class was created by government policy, investment, and the hard work of its citizenry. Today Americans are working as hard as ever, but government policy is failing to invest in a sustainable and growing middle class.

To Do Better, Together

To do better, Congress must redirect subsidies to the already wealthy and invest in opportunities for poorer families to save and build wealth.

For example, people can currently write off part of their mortgage interest payments on their taxes. But this only benefits you if you already own a home — an opportunity long denied to millions of black and Latino families — and benefits you even more if you own an expensive home. It helps the already rich, at the expense of the poor.

Congress should reform that deduction and other tax expenditures to focus on those excluded from opportunity, not the already have-a-lots.

Other actions include protecting families from the wealth stripping practices common in many low-income communities, like “contract for deed” scams that can leave renters homeless even after they’ve fronted money for expensive repairs to their homes. That means strengthening institutions like the Consumer Financial Protection Bureau.

The nation has experienced 30 years of middle class decline. If we don’t want this to be a permanent trend, then government must respond with the boldness and ingenuity that expanded the middle class after World War Two — but this time with a racially inclusive frame to reflect our 21st century population.

Dedrick Asante-Muhammad directs the Racial Wealth Divide Project at Prosperity Now. Chuck Collins directs the Program on Inequality at the Institute for Policy Studies and co-edits Inequality.org. They’re co-authors of the new report, The Road to Zero Wealth.


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Prescription Drug Spending is Consuming a Bigger Share of Wages

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Prescription drugs are a large and growing share of national income. While it is generally recognized that drugs are expensive, many people are unaware of how large a share of their income goes to paying for drugs because much of it goes through third party payers, specifically insurance companies and the government.

The Centers for Medicare & Medicaid Services (CMS) produce projections of national expenditures on prescription drugs through 2025, along with historical estimates dating back to 1960. As shown below, prescription drug spending from 1960 to 1980 was equivalent to about one percent of total wage and salary income. In the years leading up to the passage of the Bayh-Dole act in 1980, wage income was rising faster than spending on prescription drugs. As a result, the share of wages spent on prescription drugs was actually falling, reaching a low in 1979 of 0.86%.

However, after 1980, prescription drug spending rose rapidly relative to wage income. The ratio of drug spending to wages rose each year from 1980 to 2007. In 2007 wage growth finally outpaced drug expenditures, with the ratio again increasing in the Great Recession. By 2010, prescription drug spending had climbed above four percent of wage income.

The three percent of annual wage income lost to higher drug spending over the past 40 years makes a big difference to working individuals and families. This increase in annual spending averages out to roughly $2,400 per household. CMS projections, combined with projections on wage income growth from the Congressional Budget Office, suggest that spending on prescription drugs will increase further through 2025. This ratio is expected to exceed five percent by 2024.

While an aging population has been a factor increasing spending on drugs, demographics alone cannot explain the sharp increase in prescription drug spending. Inflation-adjusted prescription drug spending per household has increased more than eightfold since 1980, far outpacing any demographic trend surrounding age. The share of people over age 65 in the population has increased from 9.2% in 1960 to 14.8% in 2015. This can at most explain a small part of the increase in spending on drugs over this period.

It is important to recognize that the high cost of drugs is the result of a conscious policy decision to give drug companies monopolies in the form of patents and other forms of exclusive marketing rights. Without these protections drugs would almost invariably be cheap, likely costing on average less than one fifth as much as they do now. Even worse, the perverse incentives resulting from patent monopolies distort the research process and can lead drug companies to misrepresent evidence on the safety and effectiveness of their drugs.

 This blog was originally published at CEPR on June 27, 2017. Reprinted with permission. 
About the Authors: Dean Baker co-founded CEPR in 1999. His areas of research include housing and macroeconomics, intellectual property, Social Security, Medicare and European labor markets. He is the author of several books, including Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich RicherGetting Back to Full Employment: A Better Bargain for Working PeopleThe End of Loser Liberalism: Making Markets ProgressiveThe United States Since 1980Social Security: The Phony Crisis (with Mark Weisbrot), and The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer. His blog, “Beat the Press,” provides commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in Economics from the University of Michigan. Brian Dew holds a B.A. in Psychology and Organizational Sciences from the George Washington University and an M.A. in Economics from American University. His previous research has focused on international trade, network analysis, and open-economy macroeconomics, while his current research interests include domestic trade, employment, and monetary policies. Brian worked previously for the International Monetary Fund.


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Thousands of Piece Rate Workers in California’s Salon Industry Are Likely Owed Unpaid Wages

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Salon owners in California who pay employees on commission are subject to liability for failing to pay all wages due.  Under California law, “commissions” are a form of wages applicable only to an employee who sells a product or service, not to an employee who makes a product or provides a service to the employer’s customers.  Keyes Motors v. DLSE 197 Cal.App.3d 557 (1987). Salon employees in California whose job is to cut and/or color hair, must therefore be paid on an hourly basis, a piece rate basis, or a combination of those.  Salon technicians who have been paid on a typical net commission basis are likely due unpaid wages and statutory penalties.

Piece Rate Wages for Hair Stylists and Colorists

California Assembly Bill 1513 (AB 1513) went into law on January 1, 2016, adding section 226.2 to the California Labor Code to address compensation for piece rate work.  Piece rate workers are paid according to the number of units they complete.  Piece rate units might be defined by the numbers of widgets assembled by a factory worker, the number of cars washed by a car washer or the number of haircuts given by a barber or cosmetologist.

AB 1513 did not create new wage obligations, but instead codified the legal obligations described in two important appellate decisions that addressed the wages of piece rate workers back in 2013: Gonzales v. Downtown LA Motors, 215 Cal. App. 4th 36 (2013) and Bluford v. Safeway, Inc., 216 Cal. App. 4th 864 (2013).

In Gonzales, the court held that mechanics who worked on a piece rate basis must be paid for their non-productive time (time during a shift when the worker was not actively engaged in compensable work). An employer, the court explained, cannot average the wages worked by an employee to show that the employee received at least minimum wage for all hours she was under the employer’s control.  The employer must pay no less than the applicable minimum wage for every minute an employee is under its control, including time when no compensable work is being performed under a piece rate system.

In Bluford, the court held that piece rate workers must also be paid separately for rest periods because rest periods under California law are deemed on-the-clock, compensable work time.  If a piece rate worker is only paid by the unit, then she is not being compensated for rest periods in accordance with California law.

So, although AB 1513 did not modify the duties described in the Gonzales and Bluford cases, it provided employers a “safe-harbor” period during which the employer could take steps to limit its liability to certain types of claims or lawsuits arising out of its misclassification of technicians as commissioned employees.  To take advantage of the safe harbor protections, however, the employer was required to:  (1) notify the California Department of Industrial Relations no later than July 1, 2016 that it would pay wages due to employees who had not been compensated for non-productive time or rest periods (back to July 1, 2012); and (2) make the wage payments no later than December 15, 2016.  Many piece rate employers failed to take advantage of these safeguards. A list of employers who notified the DIR of their intention to participate in the safe harbor provision can be found at the DIR website.

Labor Code § 226.2, the product of AB 1513, places specific duties on employers of piece rate workers including:

(a) For employees compensated on a piece-rate basis during a pay period, the following shall apply for that pay period:

(1) Employees shall be compensated for rest and recovery periods and other nonproductive time separate from any piece-rate compensation.

(2) The itemized statement required by subdivision (a) of Section 226 shall, in addition to the other items specified in that subdivision, separately state the following, to which the provisions of Section 226 shall also be applicable:

(A) The total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period.

(B) Except for employers paying compensation for other nonproductive time in accordance with paragraph (7), the total hours of other nonproductive time, as determined under paragraph (5), the rate of compensation, and the gross wages paid for that time during the pay period.

(3)          (A) Employees: shall be compensated for rest and recovery periods at a regular hourly rate that is no less than the higher of

(i) An average hourly rate determined by dividing the total compensation for the workweek, exclusive of compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of rest and recovery periods.

(ii) The applicable minimum wage.

(B) For employers who pay on a semimonthly basis, employees shall be compensated at least at the applicable minimum wage rate for the rest and recovery periods together with other wages for the payroll period during which the rest and recovery periods occurred. Any additional compensation required for those employees pursuant to clause (i) of subparagraph (A) is payable no later than the payday for the next regular payroll period.

These statutory mandates codify the wage rights set out in Gonzales and Bluford.  Given the common salon industry practice of paying stylists and colorists as commissioned employee, it is likely that thousands of salon employees in California have been underpaid during the past four years.

Salon Class Action

In early 2016 Kitchin Legal filed a class action lawsuit (on behalf of 231 employees) against five jointly-owned Northern California hair salons.  The case is based on the salons’ alleged failure to abide by a wide range of California employment laws, including Labor Code § 226.2.  After months of negotiations and the exchange of thousands of lines of employee data, our clients entered into a proposed class-wide settlement valued at over $1 million.  We are now in the process of seeking court approval for the class action settlement.

Top Rated San Francisco Salon

In late 2016 Kitchin Legal filed an individual lawsuit on behalf of a stylist against one of the top ranked hair salons in San Francisco. [The lawsuit is based on the salon’s alleged violations of several California wage and hour laws, including Labor Code § 226.2.]  The salon owner, who either was ignorant of the law, or chose to ignore his legal duties, is facing a six-figure wage claim, one of the largest components of which is based on the allegation that our client was improperly paid as a commissioned employee.

Risk and Consequences

For Salon Owners

Nearly every year California passes new legislation or enacts new regulations pertaining to the duties of employers to their workers. Employers who do not have a sophisticated human resources professional on staff or a competent employment attorney on retainer to help them keep abreast of these changes can become particularly vulnerable to employment-related claims.

An employer who decides to risk non-compliance with any aspect of California’s employment laws can face significant financial consequences, including a class action lawsuit by a group of employees.  The worst decision a salon owner can make is to remain ignorant of California labor laws or to ignore its legal obligations hoping its employees will not challenge its illegal practices through a lawsuit.

The best decision a salon owner can make at any time is to have a skilled California employment attorney review its policies and practices for compliance with California labor laws, including in particular, Labor Code § 226.2.

For Salon Employees

The biggest risk facing an employee whose compensation rights have been violated is delay.  All of these claims are governed by specific statutes of limitations.  Employees can generally seek recovery of unpaid wages for up to four years (under California’s unfair completion laws).  Once the statute of limitations runs on a claim, it is gone forever, however.   Salon employees who have been paid as commissioned employees and who have not been paid separately for non-productive time and rest periods should talk with an employment attorney right away.

Patrick R. Kitchin is the founder of Kitchin Legal APC, a San Francisco, California employment law firm. He has represented tens of thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.


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The Real Living Wage? $17.28 An Hour – At Least

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Fifteen dollars shouldn’t be too much to ask – or demand.

In almost every state, a worker needs more than $15 an hour to make ends meet. Add in student debt, and the minimum living wage shoots up to $18.67 an hour nationally. A family with children needs significantly more.

That’s according to new research from People’s Action Institute, which calculates the national living wage at $17.28. A living wage is the pay a person needs to cover basic needs like food, housing, utilities and clothing, along with some savings to handle emergencies.

In some states, the living wage is much higher. New Jersey, Maryland, and New York have a living wage greater than $20 per hour for a single adult. In Hawaii and Washington, D.C., that figure hits almost $22 per hour. No state has a living wage for a single adult lower than $14.50 an hour.

This is the first report in the annual Job Gap Economic Prosperity Series to factor in the $1.3 trillion in student debt owed by college students nationwide into the calculation of what a living wage should be nationally and in the states.

“Students should not be saddled with thousands of dollars in debt after graduation. However, those who do graduate with debt need jobs that pay enough to make ends meet,” the report says. “And, making ends meet should include not only basic necessities like food and housing, but the ability to put aside money for savings and to pay off existing debt.”

In addition to calling for increasing the federal minimum wage to a living wage and eliminating the tipped subminimum wage, usually paid to people like restaurant servers, the report also calls for expanding tax-free student debt forgiveness and reinvesting in higher education to eliminate the need for student loans to begin with.

“We Just Choose Bills Out Of a Hat”

In Iowa, where the living wage is $15.10 an hour for a single person – twice the state minimum of $7.25 – and higher for families with children, people are doubling and tripling up on jobs, rooming together, and even turning to predatory payday loans.

Tonja Galvan is one of those Iowans. She makes a bit more than $20 an hour at the John Deere plant in Ankeny, near Des Moines, where she lives with her mother, daughter, and granddaughter. Even with three generations of the family working – her mother and granddaughter are paid much lower wages – they can never catch up.

“When we can’t pay everything,” Galvan says, “we just choose bills out of a hat to see what we’ll pay and what we’ll push to the next month.”

Galvan sees many other families struggling – and she’s helping take charge in a campaign with the Iowa Citizen for Community Improvement (Iowa CCI). Galvan has joined other workers, teachers, service providers, and other Iowans to press for a higher wage floor, hitting the doors in her community and speaking with county supervisors.

They’ve scored wins in four counties around the state – Johnson, Linn, Polk, and Wappelo – with a phase-in of new wage floors ranging from $10.10 to $10.75. (Johnson County’s will also be pegged to the consumer price index.)

Iowa CCI organizer Matthew Covington calls the increases “a step in the right direction,” but he’s the first to say they’re just a step. His organization is now making sure cities in Polk County match that county minimum, take it higher, and close exemptions for the restaurant and grocery industries. Meanwhile, Iowa CCI also has their sights set on the state legislature.

In Colorado, a coalition of nonprofits, faith groups, and small businesses are taking a different approach for raising the wage floor. They’re turning to the ballot box.

An initiative supported by this coalition, Colorado Families for a Fair Wage, would gradually increase the hourly minimum statewide to $12 by 2020.

Though the corporate opposition has poured money into the state, there’s plenty of business support for increase – and recent research from the University of Denver debunking claims of a negative impact on jobs.

In fact, Lizeth Chacón, executive director of Colorado People’s Alliance (COPA) and co-chair of the coalition, says the number of jobs grew after the state’s last minimum wage increase, in 2006. Those gains were seen in restaurants, small businesses, and rural areas. The number of small businesses in the state also increased.

“Small businesses helped put this proposal together,” says Chacón. “They said, ‘We’re already paying our staff more because we want them to be able to support their families and stay with us.’”

The People’s Action Institute living wage figures show just how needed these fierce campaigns are. As Iowa CCI’s Covington knows, the numbers aren’t academic. “The more we talk about actual costs,” he says, “the more it helps.”

This post originally appeared on ourfuture.org on October 25, 2016. Reprinted with Permission.

Julie Chinitz is currently the special projects director for Alliance For A Just Society. She previously served as policy director from 2010 to 2012 and as a staff attorney/policy analyst from 2002. She developed projects combining participatory research, policy analysis, and base-building. Prior to joining the Alliance, she was an Equal Justice Fellow with Northwest Health Law Advocates, where she launched a program to increase access to health care in Washington’s Yakima Valley. She is a graduate of Oberlin College and Columbia University School of Law and has worked extensively with public interest and human rights organizations.


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Does Moving Jobs Out Of The Country Affect What People Here Get Paid?

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Dave JohnsonEconomists are still arguing over whether moving our jobs out of the country affects what the people still here get paid. Yes, really.

For example, Jared Bernstein in The Washington Post looks at different studies of the effect of moving jobs out of the country. One study, by economists David Autor, David Dorn and Gordon Hanson (referred to by Bernstein as “ADH”), was published in January by the National Bureau of Economic Research. The other, by economist Josh Bivens at the Economic Policy Institute, was published in 2013. Both found that moving jobs out of the country hurt the wages of not just the affected workers but everyone in the surrounding area. The question is, does this wage-depressing effect spread outside the local area?

Bernstein writes, “The analytic question is twofold. First, are American workers really hurt by trade competition, and second, if so, are there spillovers to those not directly in competition with imports?”

To understand the difference … in Bivens vs. ADH, consider two towns, one with two businesses, a factory and restaurant, and the other with just a restaurant. In ADH’s findings, the negative spillover, or diffusion, stays mostly in the first town. The factory takes a competitive hit from cheaper Chinese imports. This, of course, directly hurts the blue-collar factory workers, but it also hurts the restaurant workers, both through demand (fewer factory workers showing up for lunch) and supply (more competition for jobs at the restaurant) effects.

In Bivens’s model, and this is the way most economists think about this (which doesn’t, by a long shot, make it correct), the ADH story holds in town one, but town two also gets hit, even though there’s no factory there facing increased global competition. Displaced workers from town one can’t find enough work there so they head for town two, and the added supply effect puts downward pressure among town two’s restaurant staff members.

It comes down to this. Do laid-off workers stay where they are (ADH), which means the wage-depression stays local? Or do they move elsewhere and compete with people who still have jobs (Bivens), thereby depressing wages there as well?

There’s a simple way to test this. Detroit and Flint are just two examples of cities hit by factories that were closed so employers could pay less in other countries but bring the same goods back here to sell in the same stores (so executives and Wall Street shareholders can pocket the differential for themselves).

So did the laid off workers stay put (ADH) or move (Bivens)? Detroit’s population was 1.85 million in 1950. That fell to 713,777 in the 2010 census. Flint’s population was 196,940 in 1960 and fell to 99,763 in 2013.

They moved. The “effect” did not stay in Detroit and Flint. So everyone else’s wages took a hit, too. Multiply what happened in these two cities nationally and you get the picture. If you don’t get the picture, here is the picture:

OK, it isn’t all that simple. ADH do look at “commute zones,” and there are other factors depressing wages. They cite technology, along with the “decline of unions, eroding minimum wages, the rise of nonproductive finance, and especially the persistent absence of full employment labor markets” as factors reducing worker bargaining power and fostering wage stagnation. Whatever. Bernstein writes the following, which is important especially as we head into an election where Donald Trump is using the costs of trade as a main issue:

Still, the main message from ADH, Bivens, and the rest of us who’ve been trying to raise this cost side of the equation for decades is that these costs are real. They’re acute for many people and places and diffuse to some degree for others. Economic platitudes about how trade is always worthwhile as long as the winners can compensate the losers are an insult in the age of inequality, where the winners increasingly use their political power to claim ever more winnings.

Most of us feel the costs of moving so many jobs out of the country (and calling it “trade”) while a few are making a killing from it. Those few are using their political power to keep the rigged game going.

P.S.: It is important to point out that once again the idea of “trade” in elite discussion is entirely about moving American jobs to places where people are paid less and the environment is not protected, in order to reduce “costs.” They don’t actually mean “trade” as in “they sell us bananas and use the money to buy cars” – because who cares?

This post originally appeared on ourfuture.org on May 12, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.


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How A Giant Restaurant Conglomerate Teamed Up With Banks To Stiff Its Workers

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AlanPyke_108x108The struggling corporate giant behind The Olive Garden, Longhorn Steakhouse, and other national restaurant chains is forcing tens of thousands of workers to effectively pay rent on their own money.

Workers at Darden Restaurants chains are routinely told they must accept prepaid debit cards instead of paychecks, according to a new report from the worker organization Restaurant Opportunities Center (ROC) United. A quarter of workers surveyed said they asked to be paid some other way and were told the cards are their only option.

The practice helps the company, which came under intense pressure to cut costs from dissatisfied investors a couple years back. But it puts an expensive barrier between workers and their money.

The restaurant conglomerate has roughly 148,000 employees in the U.S. Half of those workers get payroll cards in lieu of standard paper checks. Each card shaves about $2.75 per pay period off of the company’s overhead, saving Darden as much as $5 million per year.

Darden’s bottom-line bliss means pain and chaos for those 70,000-plus workers. The cards come with a litany of fees: 99 cents for using it to pay utility bills, 50 cents if the card is declined at a cash register, $1.75 to withdraw money from an out-of-network ATM and 75 cents just to check the card’s balance. If a worker loses her card, she’ll pay $10 to have it replaced.

As Darden cuts its administrative costs, the banks that provide the cards rack up significant income on the back end. Federal Reserve Bank of Philadelphia researchers put median bank earnings at $1.75 per card per month back in 2012. That suggests Darden’s financial partners are pulling down about $1.5 million a year

Three in four Darden workers get hit with the out-of-network withdrawal fees, according to ROC United’s survey of 200 workers who are paid with cards. Half of them have no access to an in-network ATM near where they live or work, effectively guaranteeing they will be paying fees to access their own money.

And the $1.75 withdrawal fee is only on the card-maker’s side of the transaction. The out-of-network ATM itself will tack on another surcharge, averaging $2.88 per withdrawal — and pushing the worker’s cost to access their pay up to nearly $5 each time they convert the payroll card to actual cash.

More than half of the workers report having a balance hold placed on their cards after using them at a gas pump, a practice gas stations adopted to combat theft when pump prices were up near $4 a gallon. For a restaurant worker whose payroll card is based on the tipped minimum wage — as little as $2.13 an hour — there is hardly any slack to the card’s balance to begin with. Gas station holds can freeze as much as $100 at a time, but even the standard $50 hold can easily mean that the next time that worker swipes her card to pay for something, the machine will see an insufficient balance — and the payroll card company will hit the worker with another 50-cent fee for having her card declined.

Payroll cards like Darden’s have proven popular with low-wage employers in recent years. More than 7 million workers nationwide are now paid using the cards, the report notes — mostly at companies like Darden and McDonald’s that pay workers so poorly that they remain eligible for public assistance programs despite working full time.

The cards proliferated over the past decade, with advocates arguing they would benefit employees as well as generate savings for employers and revenue for banks. Employees without a bank account would avoid check-cashing fees, card proponents noted. But the cards’ own fees aren’t necessarily much cheaper — if at all — and many Darden workers who do have bank accounts report being denied access to standard payroll practices that would avoid fees altogether. One overall evaluation of the pros and cons of the cards from the National Consumer Law Center in 2013 hinged on this question of worker choice, and found the cards could be net beneficial so long as everyone has the chance to opt for a different mode of payment.

In at least one case, card fees ended up pushing workers’ take-home pay below the minimum wage. The workers sued the McDonald’s franchisee who they say forced them to accept the cards as payment, and Chase Bank did something out of character for a high finance powerplayer: It voluntarily gave money back to the workers, refunding all of the fees their payroll cards had incurred.

That case prompted a spate of state legislative actions to police the use of payroll cards more tightly, the ROC United report notes, but roughly half of the states still have no law governing the practice. And even the states that do regulate it in some fashion do not necessarily guarantee workers can access their pay fee-free.

UPDATE MAY 12, 2016 4:07 PM

A Darden representative told ThinkProgress the ROC United report is “completely false,” save for the out-of-network ATM fees and the 50-cent fee for point-of-sale denials, and accused the group of “wag[ing] a campaign of harassment and disparagement against our company for five years.” Starting June 1, those 50-cent fees will disappear, and employees will be able to use an additional 29,000 ATMs nationwide without paying fees, up from 50,000 currently. It is impossible that some managers tell workers the cards are required despite company policy to the contrary, spokesman Rich Jeffers said. “That’s just not the nature of our people, of our leaders in our restaurants,” he said.

This blog originally appeared at Thinkprogress.org on May 12, 2016. Reprinted with permission.

Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org. He previously worked as an organizer on various political campaigns from New Hampshire to Georgia to Missouri. His writing on music and film has appeared on TinyMixTapes, IndieWire’s Press Play, and TheGrio, among other sites. Follow @PykeA on Twitter.


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On Equal Pay Day, We Could Use Some Sunshine

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Isaiah J. PooleImagine a workplace where everyone clocked in at 9 a.m. and was paid the same day’s wage for the work they did – but the men could get their pay for the day at 3:20 p.m. and leave, while the women had to stay on the job until 5 p.m. to get the same check the men got an hour and 40 minutes earlier.

That’s another way to think of the gender wage gap – with women earning on average only 79 cents for each dollar a man earns – that Equal Pay Day, April 12, is intended to highlight. The“79 percent clock” is being promoted by the National Partnership for Women and Families and MTV as a way to dramatize that wage inequity. If you are a woman, you can enter the start and end of your workday and the calculator will “show you when 79 percent of your day has passed and you (or your female colleagues) are no longer being paid.”

For an eight-hour workday that starts at 9 a.m., that moment is generally 3:20 p.m. But that’s an average; for women of color, the moment at which a woman is no longer compensated for her day could be as early as 1:24 p.m. for Hispanics or as late as 3:44 p.m. for Asian Americans. For unmarried women, that moment comes at 1:48 p.m. – 60 percent of the day – the same moment as African-American women, according to a report released this week by the Voter Participation Data Center that also includes state-by-state data for unmarried women.

Of course, if we could see men and women leaving workplaces at different hours because they weren’t equally compensated for the work they did, there would be less opportunity for denying that the wage gap is real. But salary information is usually confidential, especially in mid-level jobs and above. Often, women who are being unfairly paid for their work don’t even realize they are being discriminated against.

When discrimination is documented, we get, particularly from conservative and Republican politicians, the usual round of denials and excuses. Comments from the 2016 Republican presidential candidates are typical: “You’re gonna make the same if you do as good a job,” said Donald Trump in 2015, who has also said that determining whether a man and a woman is doing “the same job” is “a very, very tricky question.” Ted Cruz as a senator voted to block a vote on the Paycheck Fairness Act and has dismissed equal pay legislation as “just empowering trial lawyers to file lawsuits.” (Yes, that’s what lawyers do when laws are violated and people are harmed as a result, but I digress.) John Kasich suggested in 2015 that gender pay disparities are “all tied up in skills” and experience.

The Center for American Progress has published “The Top 10 Facts About the Gender Wage Gap,” and several of those facts address the myths perpetuated by the Republican presidential candidates. The wage gap is real, it does appear among men and women with the same education and experience doing similar jobs, and, according to the CAP fact sheet, “38 percent of the gap is unexplainable by measurable factors,” such as women being concentrated in certain lower-wage occupations or being more likely to have to take unpaid leave to care for family members.

Having Congress pass the Paycheck Fairness Act would go a long way toward reinforcing the already existing Equal Pay Act and getting at the root of gender pay discrimination. A key requirement in the law would be that employers would have to disclose pay information to the federal government based on race, sex and national origin. That would make it easier for the government and individual employees to hold employers accountable for violations of the equal pay laws that already exist but are regularly evaded.

Presidential candidate Hillary Clinton highlighted her support of the Paycheck Fairness Act atan event sponsored by Glassdoor.com, where she praised Silicon Valley firms like Salesforce and retailers like Gap for succeeding in closing the gender pay gap in their companies.

Bernie Sanders has likewise been a longtime supporter of the Paycheck Fairness Act, including it as the first item of his 10-point women’s rights agenda.

Like the “79 percent clock” that rings an alarm when a person has reached 79 percent of their work day, the Paycheck Fairness Act allows for an alarm bell to ring when workers are not receiving equal pay for equal work. It would bring pay inequities into the light of day, instead of the darkness in which Republican presidential candidates would rather have this issue continue to fester.

This blog originally appeared at OurFuture.org on April 12, 2016. Reprinted with permission.

Isaiah J. Poole worked at Campaign for America’s Future. He attended Pennsylvania State University and lives inWashington, DC.


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Victory in New York City: Cuomo Signs Legislation Raising Minimum Wage to $15

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Victory in New York City: Cuomo Signs Legislation Raising Minimum Wage to $15

On Monday, New York Gov. Andrew Cuomo (D) signed a law raising the state’s minimum wage. In New York City and some more prosperous suburbs, the new minimum wage will be $15, while in the rest of the state, the new minimum wage will be $12.50. The increases will be phased in, and millions will see wage increases. Future wage Kenneth Quinnellincreases will be tied to economic indicators. The law also establishes 12 weeks of paid family leave for working people.

New York State AFL-CIO President Mario Cilento applauded the legislation:

Three million working people in New York state will see their wages go up due to the $15 per hour minimum wage, making New York the first state in the country to reach that landmark.  Raising the minimum wage is long overdue and is a step in the right direction toward addressing poverty and income inequality. This meaningful wage will allow hard-working men and women the opportunity to better support themselves and their families, and enjoy a standard of living and quality of life they can be proud of.

As reported last week, California also passed legislation to raise its minimum wage to $15, reminding us that while Congress sits idle, working people throughout the country continue to fight to raise wages.

This blog originally appeared in aflcio.org on April 5, 2016. Reprinted with permission.

Kenneth Quinnell is a long time blogger, campaign staffer, and political activist.  Prior to joining AFL-CIO in 2012, he worked as a labor reporter for the blog Crooks and Liars.  He was the past Communications Director for Darcy Burner and New Media Director for Kendrick Meek.  He has over ten years as a college instructor teaching political science and American history.


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Interfaith Coalition Calls for Moral Action on the Economy

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The largest employer of low-wage workers in America is the federal government. U.S. government contractors employ over two million workers in jobs that pay too little – $12.00 an hour or less – to support a family. Contract workers – organizing under the banner of Good Jobs Nation – have walked off of their jobs repeatedly in protest, demanding a living wage and the right to a union.

This Monday, on the anniversary of Dr. Martin Luther King’s death, this movement will gain a powerful ally. Led by Jim Winkler, general secretary of the National Council of Churches and Sister Simone Campbell, executive director of the Catholic social justice lobby NETWORK, an interfaith coalition of religious leaders is issuing a call for “moral action on the economy.” They will seek to meet with presidential candidates, asking each to pledge that, if elected, he or she would issue an executive order to reward model employers “that pay a living wage of at least $15.00 an hour, provide decent benefits and allow workers to organize without retaliation.”

The movement for living wages is taking off. The federal minimum wage has been stuck at $7.25 for nearly seven years. Unable to provide for their families, fast food and other low-wage workers began to demonstrate, even at risk of losing their jobs. “Fight for 15” – the demand for a $15.00 an hour minimum wage and the right to a union – swept across the country. And is beginning to win.

In Seattle, a coalition of union, community and business leaders helped pass legislation putting the city minimum wage on a path to $15. From Los Angeles to Chicago to New York, other cities joined. In the last few days, California legislators reached a deal to move the state minimum wage to $15 by 2022. In New York, Governor Andrew Cuomo pushed through reforms that will move that state’s minimum wage to $15, starting in December 2018 in New York City.

The pressure of the government low-wage workers moved President Obama to act. He issued three executive orders, raising the minimum wage to $10.10, cracking down on wage theft and other workplace violations, and providing paid leave. The workers continued to demonstrate, calling for “more than the minimum,” seeking $15 and a union.

Senate cafeteria workers – the people who prepare the senators’ food and clean up after them – joined the protests. Their plight – one was homeless, others on food stamps, one moonlighting as a stripper to feed her children – was embarrassing. Democratic Senate staffers organized to support them. Democratic senators like Bernie Sanders (Vt.), Elizabeth Warren (Mass.), and Brian Schatz (Hawaii) demanded action. When the cafeteria contract was up for renewal in December, workers were granted pay increases of $5 an hour or more. It took more pressure and Labor Department investigation to make the raises stick, but today workers are finally receiving their pay.

Washington Post columnist Catherine Rampell, who has documented the struggle highlighted one beneficiary, Bertrand Olotara, a cook in the Senate cafeteria. His wage went from $12.30 to $17.45 an hour. He was able to quit his second job at Whole Foods and stop working seven days a week. That gave him more time with his five children. He’s even thinking of using the extra time to write a book. A living wage makes real differences in people’s lives.

Now the interfaith coalition joining with these workers and calling on those contending for the presidency to promise to do more. Republican contenders are still opposed to raising the minimum wage. Bernie Sanders has made a $15 an hour minimum wage a central plank in his platform. Hillary Clinton has supported lifting the national minimum wage to $12.50, accepting that some states and cities might go higher.

The interfaith alliance is calling on the presidential candidates to pledge moral action on the economy. When Ronald Reagan came to office, one of his first acts was to fire and replace the striking PATCO air controllers. He sent a message to employers across the country that it was open season on workers and their unions. Imagine the next president taking office and issuing an executive order lifting the wages of millions of contract workers and guaranteeing a right to organize without retaliation. Again a signal would be sent across the country.

“This election is fundamentally about whether the next president is willing to take transformative executive action to close the gap between the wealthy and workers – many of whom are women and people of color,” argues Jim Winkler, secretary general of the National Council of Churches. It’s time to take the pledge.

This blog originally appeared in ourfuture.org on April 4, 2016. Reprinted with permission.

Robert Borosage is a board member of both the Blue Green Alliance and Working America.  He earned a BA in political science from Michigan State University in 1966, a master’s degree in international affairs from George Washington University in 1968, and a JD from Yale Law School in 1971. Borosage then practiced law until 1974, at which time he founded the Center for National Security Studies.


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Important Study Looks At Silicon Valley’s “Invisible” Low Wage Workers

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Dave Johnson“We knew the tech industry was booming, but we weren’t seeing that translate into an abundance of jobs for our communities – until we looked at the low-wage jobs in contracting industries. Those are growing fast, just like tech profits are. It’s no wonder that one in three working households in Silicon Valley can’t make ends meet when these growing industries pay wages that barely cover rent.”
– Derecka Mehrens, Executive Director of Working Partnerships, USA.

Working Partnerships USA and Silicon Valley Rising released a report Wednesday, Tech’s Invisible Workforce, that looks at the contract industry workers at Silicon Valley’s “booming” tech companies.

In the last two-and-a-half decades, the number of Silicon Valley “second-class” jobs in potential contract industries has grown three times faster than overall Silicon Valley employment. These contractors and subcontractors jobs are disproportionately filled by Black and Latino workers compared to direct tech employees, and these workers receive much lower wages. As a result, Silicon Valley’s inequality and occupation segregation is amplified, especially among people of color.

The report finds that direct tech employees earn $113,300. Contractor and subcontractor tech industry workers – workers employed indirectly rather than treated as legitimate employees – are paid much less. White-collar workers in contract industries average $53,200 and blue-collar workers in contract industries average $19,900.

Along with this wage differential, as income drops the proportion of the workforce that is comprised of Black and Latino workers goes up. According to the report, Black or Latino workers make up, on average:

? 10 percent of Silicon Valley’s direct tech workforce.
? An estimated 26 percent of the white-collar contract industry workforce.
? An estimated 58 percent of the blue-collar contract industry workforce.

Lydia DePillis writes about this report at The Washington Post’s Wonkblog, in “What we know about the people who clean the floors in Silicon Valley,”

Silicon Valley companies have gotten a lot of heat in recent years for failing to recruit people black and Hispanic people into their ranks. But if you factor in contractors and others whose jobs bring them inside those companies, the industry appears bit more inclusive — just perhaps not in the way one might hope.

At one time in history, the janitors, bus drivers, food service workers, and security guards who staff corporate campuses might have been employed directly by the businesses where they cooked lunches and cleaned floors. That’s become less and less true in recent decades, according to a new analysis of labor data by researchers at the University of California – Santa Cruz — especially in Silicon Valley.

The Road to Responsible Contracting

The report concludes with a section on how companies could contract out jobs responsibly.

Silicon Valley Rising calls on our region’s leading businesses to commit to the following principles:

Responsibility: Ensure that their subcontracted workers are paid a livable wage, receive equitable benefits, have the right to a voice at work without fear of discrimination or retaliation, do not suffer mass layoffs when contracts change hands, and are protected from misclassification and other forms of wage theft.

Transparency: Release public data on their subcontracted workforces, including diversity, pay, and benefit data for each subcontractor.

Inclusion: Invest in building a community where janitors, security officers, cafeteria workers, teachers, nurses, firefighters and other non-tech workers can afford to live. Support access to full-time work, affordable housing, an accessible, world-class public transit system, and high-quality education for low-wage workers and their children.

Opportunity: Work with advocates to explore new approaches to create education and career pathways for contract workers and their families to move into core tech jobs.

The technology industry faces a clear choice. It can continue the status quo of exclusive jobs and exclusionary growth, widening the existing racial, gender and income gaps and accelerating the race to the bottom. Or it can wield its enormous economic influence combined with its capacity for innovative solutions to become a true global pioneer – to not just disrupt markets and technology, but to disrupt inequality.

Click to read the report, Tech’s Invisible Workforce.

See Also

Campaign for America’s Future has been covering Silicon Valley Rising’s fight to improve conditions for this “invisible” workforce.

The Silicon Valley Rising launch: “Silicon Valley Rising Fights for Worker Justice

The fight: “Silicon Valley Rising Fights To Give Part-Timers “Opportunity to Work”

Related: “Tax Scams, Google Buses Mean Silicon Valley Is #StuckInTraffic

This blog originally appeared at ourfuture.org on March 30, 2016.  Reprinted with permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.


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